Impatient? Then Your Credit Probably Stinks

Were you sitting and drumming your fingers while waiting for this page to load? Do you think instant coffee takes too long? If you’re impatient, more than just your blood pressure will suffer: You’re also liable to have poor credit, according to a new study. Stephan Meier and Charles Sprenger, professors at Columbia University and Stanford University, respectively, collaborated on research that will be published in the Journal of Psychological Science next month. The key finding of their paper, “Time Discounting Predicts Creditworthiness,” is that people who demand instant gratification pay for their gotta-have-it-now attitude in the form of lower FICO scores.

Meier and Sprenger surveyed 437 people and asked them to choose whether they’d rather get a small, immediate payment or a larger one in the future. Participants were asked a few different variations of this question so the researchers could figure out the “discount factor;” that is, how much money it took before people’s patience kicked in and they selected waiting for a payout.

“The most extreme choice was $22 now or $50 in a month,” Meier says. “There were a surprising amount of people taking the $22.”

The participants most willing to be patient and wait for a larger payout had FICO scores of 30 points higher, on average, than those who would take a smaller payment they could get immediately.

“I think about it as a variation of impatience,” says Meier. When it comes to financial decision-making, he says, “They will probably not pay their bills, and I think it makes sense that impatience correlates with that behavior because it’s a decision that has benefits right now.”

Most sobering was the finding that people who were least patient had average FICO scores of below 620 — a commonly used designation to separate prime from “subprime” borrowers. These borrowers generally have less access to credit and must pay higher rates for loans.

The study was controlled for income and total debt as well as demographic differences, so the responses weren’t based on other financial pressures. People who displayed impatience in a lab setting and had correspondingly lower credit scores are more likely to do things like pay their credit cards late or skip a payment because the immediate benefit — more money in their bank account now — outweighs the long-term benefits of paying on time like not having late fees or paying higher interest rates.